Trump’s Canada tariffs meet election pressure as Republicans face midterm risks

The United States and Canada are discussing a possible agreement to ease tariffs on Canadian steel and automobiles, as US President Donald Trump faces mounting political pressure ahead of the November 3 midterm elections.

The negotiations focus on duties imposed under Section 232 of US trade law, including tariffs of up to 50 per cent on Canadian steel and 25 per cent on automobiles. Officials from both countries are exploring potential relief, although the scope and timing of any agreement remain uncertain, Reuters reported on Tuesday, citing US and Canadian sources familiar with the discussions.

The talks come as trade tensions between the two neighbours threaten to become an electoral liability for Trump’s Republican Party. With the party facing the risk of losing control of Congress, candidates in US border states have called for an end to the trade dispute with Canada.

Only 32 per cent of Americans approved of Trump, according to a Reuters/Ipsos poll. The political pressure adds urgency to efforts to find common ground with Ottawa, although US negotiators are still seeking further concessions from Canada.

According to Reuters report, an agreement on steel and auto tariffs could be reached before the midterm elections. The report, however, indicated that the Trump administration wanted additional concessions from Ottawa. Any agreement could be limited to specific sectors rather than resolving the wider trade dispute between the two countries.

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Why steel and auto tariffs matter

The negotiations centre on tariffs imposed under Section 232, which allows the US government to restrict imports on national security grounds. The duties have increased costs for industries that depend on cross-border supply chains, particularly automobile manufacturers and steel producers.

The United States and Canada have deeply integrated manufacturing sectors. Vehicles and components routinely cross their shared border during production, making tariffs a source of additional costs for manufacturers operating on both sides.

US automakers had expected earlier trade negotiations to provide relief from the original 25 per cent tariffs on Canadian vehicles and parts. Those expectations were disappointed when talks collapsed in August, partly over disagreements concerning duties on medium- and heavy-duty vehicles that are important to Canadian factories.

Trump had also announced plans to increase tariffs on steel and automobile imports from Canada to 50 per cent from January 1, 2027.

A targeted agreement could offer some relief to manufacturers, but a narrow deal would leave broader questions about US-Canada trade relations unresolved.

Canada says Washington is moving closer to its position

Canadian Prime Minister Mark Carney has indicated that discussions with Washington have intensified, while maintaining that Ottawa has not changed its position.

Speaking to reporters, Carney said any progress made so far reflected the United States moving closer to Canada’s position. He did not provide details of the negotiations.

According to Reuters, an agreement, if reached, could come quickly but would probably be limited in scope.

Canada has maintained that it wants an agreement that benefits both countries. Its approach also reflects the economic importance of preserving access to the US market while resisting trade measures that increase costs for Canadian businesses.

Commerce Secretary Howard Lutnick has emerged as a central figure in the negotiations because Section 232 tariffs are administered by the US Commerce Department. Lutnick and Dominic LeBlanc, Canada’s minister responsible for US trade, have been in regular contact, according to Reuters.

The office of the US Trade Representative has also been in contact with Canada over the broader structure of a possible agreement and other trade issues.

A spokesperson for LeBlanc said Canada remained in constructive dialogue with its US counterparts and was prepared to work towards a mutually beneficial trading relationship that respected Canadian interests.

The White House and the Commerce Department did not immediately respond to requests for comment, Reuters reported.

Can a limited deal ease wider trade tensions?

The latest discussions follow signs that both governments are looking for ways to manage the economic fallout from their trade dispute.

On Friday, Trump signed an order removing 50 per cent tariffs on certain Canadian agricultural and forestry products, a move that could benefit businesses in Maine. At a political rally on Sunday, he also predicted that the dispute with Canada would be resolved soon, without providing further details.